Fake ITC invoices on the rise

Mumbai: The officers of CGST and Central Excise (Cx), Mumbai Central Commissionerate, arrested a person in an ongoing investigation involving receipt and supply of ineligible Input Tax Credit (ITC) amounting to Rs 6.46 crore.

SR Enterprises availed of ITC by producing fake invoices issued by various Non-Existing, fake, fictitious firms without actual receipt of goods. This quantum is likely to go up after further investigation. The investigation was carried out by acting upon specific intelligence developed locally and supported thoroughly by data-based analysis.

"Investigation appears to show that this firm availed the ineligible Input Tax Credit (ITC) against fake invoices (where no supplies from any suppliers have been physically received) and passed on the same to other buyers. This fraudulent activity is causing a severe loss of revenue to exchequer," said Rajesh Sanan, Commissioner. CGST and Cx, Mumbai Central.

In this connection, search and inspection was conducted by the Anti-evasion team of CGST and Central Excise, Mumbai Central Commissionerate at the office and go down of proprietor and after detailed questioning, one person who is proprietor of the firm was arrested on September 24 under relevant section of CGST Act and relevant provisions of CrPC for availing ineligible ITC amount of Rs 6.46 crore and was produced before the Additional Chief Metropolitan Magistrate, Fort, Mumbai.

The court has remanded the accused to 14 days judicial custody. Further Investigation in the matter to identify other scamsters involved in the tax fraud is under process. This is the second arrest by CGST and Central Excise, Mumbai Central Commissionerate in last 2 days. The department has launched a drive against fake invoice racketeers who try to defraud government exchequer and lead to unhealthy competition with honest taxpayers. This is a step to highlight the department's commitment and support to honest taxpayers.